Maude said the changes in its procurement processes had already put the government on track to save £1bn this year from efficiencies such as curbing discretionary spending on consultants and agency staff.

A central Government Procurement team will consolidate the buying of common goods and services, using its scale and good credit rating to get better value.

Findings from a review of current practices revealed contracts for the same ink cartridges from the same supplier could vary from between £85 and £240.

Maude described the situation as "bonkers".

"We are putting a stop to this madness ... until recently there wasn't even any proper central data on procurement spending. As Sir Philip Green found, major efficiencies are to be found in government buying."

As part of the changes, the government is also committing to placing 25% of its business with SMEs by making its tender process more open.

A Cabinet Office spokeswoman said however that "in some instances consolidating spending is likely to favour bigger suppliers", but added that the 25% target was for the entire £65bn spent by the government as whole, rather than the £13bn of the Cabinet Office.

She added that the tender process was becoming more open in the sense that "the suppliers come to us and offer solutions, rather than us being proscriptive in our tenders," which she said favoured SME businesses.